Important vs. Critical Talent: What if the Beatles Had Been a Company?
This chapter is from the book
This chapter is from the book
This chapter is from the book
- Connecting goals, critical success factors, and results
- Jobs that are important but not critical
- Allocating limited resources in a high impact way
I have to begin with a short story, before getting to the Beatles, about the evolution of a mindset: my mindset on talent. It’s a story about Coca-Cola and Germany during the fall of the Berlin Wall and a mid-career CPA from Ohio. The experience I had in Germany with Coke, before ever having been in an HR role, set in motion a series of experiences that led me to an entirely new perspective about the value of talent to organizations operating in our modern economy.
Leading the Finance organization in 1993 at Coca-Cola’s German Division, one of the company’s largest businesses outside the U.S., I was tapped to pilot a new enterprise business model that was being tested in a few locations around the world. The intent of the enterprise model was to bring focus to the factors most critical to achieving the company’s stated goals and to document in detail how the work required by each of those critical factors was performed. By understanding these elements, we could make better decisions to evolve structure, close gaps, streamline work, and invest in the organization and information systems.
I had just spent nearly three years as part of the management team that rapidly invested half a billion dollars in the former East Germany, and we had captured a clear lead in the non-alcoholic beverage market. We were successful in part because of the infrastructure we already had on the ground in West Germany. Our scale and resources in the West were a clear advantage, as were our relationships with key customers who also wanted to develop the East, and our production capabilities, particularly in one-way packages.
On the other hand, our organization was rigid. For example, the people on my finance team had been in the same roles for an average of 19 years. They were very, very good at what they did, but not so good at what they didn’t do. We had unlimited opportunity in the East, but our organization’s flexibility was limited. Our German organization needed a way to evolve but was culturally change-adverse. For these reasons, we were an ideal choice to pilot a model that facilitated structural change and did so by involving people and connecting to business outcomes.
A key aspect of the model required us to rank critical success factors according to their importance to achieving business goals. Critical success factors (CSFs), defined as those things that must be done well in order for the business to succeed, generally ran along organization lines (for example, the marketing organization). Sometimes however, multiple functions in the organization might contribute to achieving a particular CSF, depending on the work required. It was a humbling, yet revealing, experience to discover that financial management ended up near the bottom of the ranking among 16 CSFs in terms of importance to achieving our company goals. Of course all CSFs are “critical,” but some are just more critical and value adding than others. Enhancing the Coke trademark, to no one’s surprise, out-ranked financial management as a factor critical to success.
At that time, I had been a member of Coke’s Finance team for 11 years and found this conclusion disconcerting and almost embarrassing. However, the analysis made it crystal clear that this was indeed the case. It followed that although everyone in the organization was important (myself included, I hoped), certain people were in roles that, by design, contributed significantly more value than others as defined by their relative impact on achieving the company’s goals. The more value-adding roles of course were concentrated in those parts of the organization that drove the highest-ranking critical success factors.
The outcome of this experience was the objective, even inarguable, conclusion that some roles are more valuable to the business than others. But that is a difficult position for many to adopt. Even my reaction to learning how low Finance ranked—one of near-embarrassment—indicates how deeply-seated our idea of equality and fairness is to the culture of work.
Which brings us to the Beatles.
In search of a way to remove the sociological barriers to thinking about talent and equality, the Fab Four popped into my mind as a way to objectively achieve that end. The rock-and-roll band that changed the world of music forever in just eight years and sold more than 600 million records certainly did not do all of that work alone. There were managers, producers, recording engineers, and even the guitar tuners.
Imagine how many times guitars needed to be tuned over the course of hundreds of live concerts. There is no doubt that the role of guitar tuner was essential to the band’s sound and brand. In fact, the tuner may have technically been a better guitar player than any one of the Beatles themselves. But they weren’t a Beatle. John, Paul, George and Ringo were. And although it is a very important job and not an easy one to do, there are probably tens of thousands of people in the world that would have been qualified to professionally tune a guitar. And certainly, the band greatly appreciated and valued their skill and service. But for the Beatles as a business, critical success factors centered on performing, song writing, music distribution, and public relations.
Certainly, the fellows who so expertly tuned the guitars would not have kept their jobs for long if they hadn’t fit in well with the rest of the Beatles’ crew, didn’t get the job done expertly and on time, and couldn’t be relied on to help make the whole venture work. I assume they got paid at least as well as others who did similar work; in fact, it is likely they worked, as needed, for multiple client bands. I guess you could say the same for all the individuals who packed and moved and unpacked the Beatles equipment as well. They all were important in the same way I was important as a Finance leader at Coke.
I definitely felt important as a newly minted CPA when I first joined Coca-Cola in 1982. It was a dream company for me; plenty of things to be proud of and everyone always seemed to enjoy hearing about “how Coca-Cola was doing.” What a great company to be associated with! But realistically, what I did was important although not really unique in any particular way. I wasn’t tasked with inventing a lot of intellectual capital or things investors would ultimately pay a lot of money for. My role was important, but a whole lot of people could probably have done my job. The fact remains, if someone else had done my job and performed either 25% better or 25% worse than me over all those years, the impact on the price of the stock would have been negligible in either case.
That is not to say that my job was not important, that it did not have to be done well, that I was overpaid, or that performing 25% better than average wasn’t a good idea. But I trusted—even took for granted—that others in the organization would ensure Coca-Cola’s relevance to consumers, that we would continue to innovate (Diet Coke, Fruitopia, Power-aide, Simply Juices, and Coke Zero were all introduced during my tenure) and that we would outpace our competitors. I had no doubt that McDonald’s would continue to serve only Coca-Cola products and remain our largest single customer in the world.
All of this was worth its weight in gold to me at cocktail parties and weekend neighborhood barbecues. If the people behind all of those efforts couldn’t sustain and grow the business, it could severely damage my valuable social currency. On a subtler note, I hadn’t believed that my comrades in the Finance organization, despite their best efforts, could have had the same impact on the value of stock in my IRA and, eventually, my stock options as those creating the magic with brands and consumers. Supporting their work from a financial standpoint was well worth it to me.
Still, in spite of all I experienced and the objective analysis I eventually led in Germany, I can understand how difficult it is for business leaders, particularly Human Resource professionals, to think about some roles (and the people in them) as being more valuable than others. So rather than over-investing in the acquisition and retention of these key skills, organizations typically opt to spread limited resources equally across the organization. Examples abound:
- One HR Business Partner per function or per “x” number of employees
- One approach to recruiting across disparate disciplines
- One set of salary ranges by job level across varied functions
- Every employee participating in the same type of onboarding, training, and performance management efforts
A dramatic cultural change must take place for businesses to strategically connect investment in people with value creation.
All people are equally as important as individuals, but some are more critical to the business by virtue of the roles they play now and will play in the future. Given the importance of human capital to the valuation of businesses, the people strategy has to be focused on these roles to drive the most value.
Think about it: If the Beatles had been a typical company, everyone associated with the band (the roadies, producers, marketers, and the musicians themselves) would have received the same general approach to compensation, training, performance reviews, and so on. George and Ringo would have received engagement surveys, and their opinions about how well things were going would have carried the same weight as the guitar tuners’. And if Paul had quit, they might have just posted the job in the same way they might have advertised for a stage hand. With an equal approach to everyone and everything, the entire company would never have survived the Rolling Stones.
Back in Germany in 1993, we set out to understand how our most important goals were achieved by connecting critical success factors to the organization and, ultimately, to specific roles. The logic of this model stuck with me, and I had the opportunity years later to begin connecting the dots between financial value and talent decisions in a bigger and more measurable way when leading Global Talent Acquisition at Coke.